Xmas jobs shock for City Link staff

Nearly 3,000 workers are facing redundancies over the holidays after one of Britain’s biggest parcel delivery groups went into administration on Christmas Eve.

City Link, which has 2,727 employees, called in administrators from professional services firm EY after years of “substantial losses”.

The Coventry-based company, which is understood to count John Lewis among its largest clients, now expects numerous redundancies after no buyer could be found to bail it out.

Operations have been suspended at all its depots until Monday, when customers and those expecting deliveries will be able to collect their parcels.

Hunter Kelly, joint administrator to City Link, said: “City Link Limited has incurred substantial losses over several years.

“These losses reflect a combination of intense competition in the sector, changing customer and parcel recipient preferences, and difficulties for the company in reducing its cost base.

“The strain of these losses became too great and all but used up Better Capital’s £40 million investment, which was made in 2013 and intended to help to turn around the company.

“Despite the best efforts to save City Link Limited, including marketing the company for sale, it could not continue to operate as a going concern and administrators were appointed.”

Investment firm Better Capital, led by veteran venture capitalist Jon Moulton, bought the courier group for just £1 in April last year from previous owner, pest control firm Rentokil.

A number of staff will be retained to help return parcels to customers and help with winding down the company, EY said.

The RMT union told its members on Christmas Eve that it understood wages owed up to December 31 would be paid, but any further payments are not guaranteed.

Mick Cash, general secretary of the RMT, vowed that the union would “do everything within its power to mobilise a political and industrial fight” to save jobs.

He said: “This is the bitterest blow any group of workers could receive on Christmas Day and it is absolutely shocking that the company have sprung this announcement once all the Christmas deliveries have been completed.

“They knew yesterday that the administrators had been brought in and yet refused to confirm it in a cynical effort to bury the bad news.

“City Link is a perfectly viable business sold off for a pound to a bunch of cowboys who had no interest in keeping the company afloat and the result is that nearly 3,000 workers face the bleakest possible new year.

“It is a disgusting and callous reflection of business methods in Britain as we head into 2015.

“RMT will do everything within its power to mobilise a political and industrial fight to save the thousands of jobs that have been put at risk as a result of this shock announcement.”

The RMT told its members yesterday that it understood that wages owed up to December 31 would be paid, but any further payments are not guaranteed.

Customers who had placed parcels with the company on Christmas Eve and intended recipients who have been notified of a failed or pending delivery are urged to retrieve their parcels as soon as possible on or after December 29.

They can do so at the company’s 53 depots throughout the UK, which will remain open for a short period of time to enable people to collect their parcels.

Founded in 1969, City Link said on its website that it had annual revenues of approximately £300 million, a fleet of 1,700 vehicles and delivered 60 million items across the UK and worldwide each year.